The shipping industry requires a unique form of insurances large investments are
exposed to considerable risks and unforeseen losses are always present in
addition liabilities connected with the operation of a ship are numerous and
immediate therefore a ship owner relies upon overall insurance cover
to an extent that is practically but financially safe typical ship owners
insurance includes hull and machinery insurance covering physical damage to or
loss of vessel and equipment hull and freight interest covers the financial
interest that a ship owner may have in the vessel beyond the insured value loss
of hire covers loss of income as a result of damaged covered by the hull
and machinery insurance war insurance P&I insurance covering certain third
party liabilities
the learning of reduced the vessel staff to the development of the P&I insurance
the scope of the P&I insurance cover and how the mutual clubs are managed
while whole insurance began in the 16th century P&I insurance did not develop
until the 1850s at that time ship owners saw a need for cover of third-party
contractual liabilities and other risks not covered by hull insurance in the
early days the owner of a ship was often the owner of the cargo if the cargo
owners interests were different the ship owner had full indemnity clauses from
cargo owners the right to compensation in various countries was not well
developed with respect to ship owners liability for personal injury or damage
to property from 1850 onwards however third-party and contractual liabilities
of ship owners increased cargo interests attack the indemnity clauses of freight
agreements and gradually gained the goodwill of the courts ship owners
liability for damage caused by his employees arose of society became
increasingly aware of the ship owners social responsibility for the well-being
of his employees this resulted in a considerable increase in liability for
the ship owner and the need for insuring this risk the result was the
establishment of one of the first P&I clubs in England
within the past decades the development of Cree and I insurance has been
remarkable it is now as important for the ship owner as any other insurance
most countries require P&I insurance to left the vessel sale and the ship owners
cannot afford to risk their fortune by not having P&I insurance P&I clubs are
Mutual Insurance Association's many of which have been in existence since the
1850s they enable ship owners to protect themselves against the many legal
liabilities to which they are exposed in the course of their business the clubs
derive their economic strength from mutuality they are nonprofit
organizations which collect premiums and if necessary levy supplementary calls in
order to pay claims and to cover administrative costs protection and
indemnity insurance covers ship owners charters and ship operators against
liabilities arising in direct connection with the operation of a vessel the
insurance covers the ship owners liabilities to third parties the
insurance supplements the hull and machinery insurance
please move the correct sentences to the boxes
a ship owner or chitara becomes a member of a P&I Club by ensuring a vessel with
the particular Association the entry is valid until cancellation or until the
vessel is sold by the owner or wrecked a ship owner or a charter wishing to enter
a vessel into a mutual P&I club provides the association with relevant
information about the risks to be ensured the P&I club issues a
certificate of entry merely as a confirmation that the vessel is entered
into the Association the certificate of entry contains extracts of the insurance
conditions the certificate of entry also refers to the association's statutes and
rules in force at the time in question
the following factors will influence the premium tonnage or size of a ship flag
and type trading area type of cargo nationality of crew and type of crew
contract and the performance of crew and ship management
the premium comprises two elements advanced premium agreed between the
owner and the club for an insurance year subsequently adjusted depending on the
individual performance by the vessel owner supplementary contribution to be
paid at the end of the policy year based on the performance of the whole
membership of the P&I club according to the principle of mutuality the members
share each other's risks and supplementary contribution will only be
calculated to the extent it is necessary to balance out the year
similar to other Insurance Association's P&I claps have arranged for reinsurance
in order to protect the members against very large claims the 14 major P&I clubs
have also formed the international group of P&I clubs the clubs within the
international group cover almost 90% of the world's merchant fleet through this
arrangement the club share major claims and by reinsurance for catastrophic
claims
the P&I insurer handles most of the claims the club has a large staff of
claims adjusters within the organization and has also appointed correspondents in
ports worldwide the correspondence of the clubs working close cooperation with
the ship's agent in such matters as arranging surveys and appointing lawyers
if legal proceedings are started the centralized claims adjustment through
the club helps to develop the experience and know-how required to guarantee
effective and rational defense against claims made against the ship owners
liabilities incurred by ship owners occur throughout the world the
legislation and legal practice will therefore vary accordingly the P&I club
is nevertheless willing to cover a ship owner for any legal liability
irrespective of the applicable legislation in short P&I cover has no
geographical restrictions
much of the everyday work at the P&I Club involves answering inquiries from
members on current problems yet the greatest amount of the club's work
focuses on the investigation and processing of claims for settlement the
P&I underwriter is also engaged in rather extensive advisory work for
prevention and limitation of the memberships liabilities by means of
handbooks circulars newsletters and special magazines the P&I clubs also
arrange for seminars on specific topics please familiarize yourself with the
scope of the cover in the three areas protection risks personal injury and
claims protection risks vessel and other property and indemnity risks
the P&I insurance covers personal injury loss of life in respect of crew and
third parties and operations to save life at sea medical hospital funeral and
repatriation expenses in respect to sick or injured members of the crew
repatriation expenses unemployment indemnities and loss of effects of
shipwrecked crew expenses
it's in connection with stowaways deserters and refugees extraordinary
expenses incurred in cases of outbreak of plague or other diseases and
quarantine and disinfection expenses
the P&I insurance covers loss of or damage to any other ship boat or craft
auto property on board them so far as such liability is not covered under the
ordinary hull policy damage to any other vessel or property thereon without
actual contact for example wash damage damage to docks piers jetties boys
cables or other objects of a like nature and property thereon cost of
compulsorily raising removing or destroying the wreck of the entered ship
or any other ship sunken collision with or by the fault of the entered ship
insofar as such liability is not covered under the ship's hull and machinery
policy loss or damage for which a member may become liable under an indemnity
given to the owners or operators of tugs craft cranes or other appliances used
for towing loading or discharging insofar as such liability is not covered
under the ship's hull and machinery policy oil or any other polluting
substance escaping from an internship resulting in loss damage or
contamination for which the member may become liable
the P&I insurance covers claims for loss short delivery pilferage of or damage to
goods intended to be or being or which have been carried in the entered ship
fines imposed by government or custom authorities in respect of short or over
delivery of cargo smuggling desertion presence of stowaways breach of
immigration regulations cargoes proportion of general average and/or
special charge is not recoverable by reason of a breach of the contract of
carriage costs of Defence in a governmental or other enquiry incurred
with the approval of the club and in any other case which the club considers
involves a question of importance or principle to the members third party
liability in respect of owned or leased containers or other transport devices
nightclubs are non profit insurance associations which derive their economic
strength from the principle of mutuality P&I clubs collect premiums and if
necessary levy supplementary calls in order to pay claims and to cover
administrative costs P&I clubs enables ship owners to protect themselves
against the many legal liabilities to which they are exposed in the course of
their business the owners of entered ships are called members and exercise
their authority through the elected Committees of the clubs the liability
covered by the P&I club is that which has arisen in direct connection with the
operation of the entered vessel the P&I club will cover a ship owner for any
legal liability irrespective of the applicable legislation